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For many years the ongoing mantra emanating from IT journals, blogs from so called IT evangelists and IT conferences has been ‘the need for IT to demonstrate VALUE to the business’.

As IT Service Management professionals, we understand the commercial importance of IT needing to demonstrate business value. However the topic is often expressed in fiscal and business school language that resonates with the senior members of the IT directorate, i.e. Chief Information Officer (CIO), Chief Financial Officer (CFO) but sadly excludes our IT colleagues.

Typically for most IT professionals involved in day to day IT service provision this fiscal and business school view of value seems somewhat divorced from the day job. In fact, when we better understand the concepts of value and how customers ultimately determine whether the IT service provision is providing business value, then we can see a direct and strong connection between our day to day ways of working and the delivery of value for money IT services.

This connection has been recognised and emphasised in the new ITIL Practitioner Guidance publication. ‘Focus on Value’ now being defined as one of the new 9 guiding principles that help distil the core messages of ITIL.

However, to focus on value requires us to first better understand what actually constitutes value from the customer’s perspective. We can gain a good insight from the ITIL Service Strategy core publication which defines the characteristics of value as:-

• Defined by the customer
• Affordable mix of features
• Achievement of objectives
• Changes over time and circumstances

It further expands our understanding of value by explaining the ‘structure’ of value. The book explains how the customer view of value is derived from 3 aspects:-

• Value Creation – To deliver value, the IT services provided must enable the business to achieve their business outcomes. This is a given and is not influenced by low cost. Consider if you buy a cheap rail ticket the desired outcome for you is the train departs and arrives on time. The reduced fare is of no relevance if you arrive 2 hrs late and this completely disrupts your plans.

• Value Add – The terms value added, adding value, value add inter-alia are used where additional benefits have been provided to the customer which they were not expecting and have been provided typically at no additional cost. Consider here how CSI can make a significant contribution in demonstrating to customers the value add being provided from the IT service providers people and their capabilities. The greater the value add provided the more this begins to influence the customer perception of value for money.
• Value for Money – It is only when the customer starts to consider the ‘Cost’ incurred against the ‘Value’ and benefits gained that a sense of ‘Value for Money’ is formed. As stated above, business outcomes have to be achieved before value for money is considered. The additional value provided will also strongly influence customer perception. However, If customers believe their IT costs are too high and not competitive then regardless of how well their business outcomes have been met and the additional value provided, this will create a feeling of poor value for money and a view they could get the same service at a lower cost elsewhere.

The insight provided from the above provides us with some essential learning about the customer and how they determine value. What emerges is that the ultimate decision on whether the IT services utilised have provided business value and value for money remains solely with the customer and that their view of ‘value’ is a judgement that is significantly influenced +/- by perception.

There is no point telling the customer the worth of the IT services provided and the fantastic capabilities of the IT service provider organisation if the customer doesn’t see, feel and sense the value provided.
Remember the famous saying that “perception is reality”? Where customers are unsure of the value provided by their IT service provider then their perception is set accordingly. The danger here is that in the absence of value, then this brings into sharp focus cost. Being viewed by your customer as a cost is a precarious position to be in and likely to lead to low levels of customer satisfaction and being viewed as providing poor value for money. Loss of business is a possibility.
Good IT service providers will recognize the importance and relevance of positively influencing the customer perception of value and value for money as this is more likely to achieve high levels of customer satisfaction, instill over time customer loyalty and retain their customers’ business.

Managing customer perception and their expectations is now such a commercial imperative that this should be an essential tenet of the IT service providers Service Management strategy.

When we consider ITSM strategy the ITIL guidance offered is to base this on the four pillars of service management. The ‘Four P’s’ recognizes that the value to customers in the form of high quality IT services cannot be achieved without the ‘alignment’ of all People, Processes, Products and Partners. This in essence is the ‘raison d’etre’ for IT Service Management to ensure value is delivered to customers from affordable IT services that provide good value for money.

However, as we have already seen value and value for money are interesting concepts in that they are ultimately determined by the customer and significantly predicated on perception. An extreme view to make a point could be, that for the IT service provider regardless of how well they execute their service management capabilities, how reliable their IT services are and how cost effective they are at IT service provision, that this doesn’t guarantee that their customers will feel they have had value for money. This requires the IT service provider to be proactive in positively influencing their customers perception so they see, feel and sense the value being provided.

So for the IT service provider to be successful requires more than just the Four P’s. It also requires a good understanding on how customer perceptions are formed and how these can be positively influenced so that customers can more readily recognize value and value for money from their IT service provider.
We therefore contend that Perception’ is now the Fifth P. How perceptions are positively influenced needs to be factored into your Service Management strategy and planning. In practical terms this should include:-

• Stakeholder analysis to identify and segment customer stakeholders into those who pay for the service, those who agree the SLA and those who use the service to help shape a targeted approach to 2-way communications.

• A communications strategy is required to ensure key stakeholders across the business receive timely and appropriate communication to enable the IT service provider to proactively demonstrate where they are making a difference to the customers IT services.

• Communications plans are devised for each Stakeholder grouping making use of the most appropriate communications channel, i.e. Face: Face, Email, Reports, Flyers.

• Reward and Recognition systems are geared to encourage people to focus on value to the customer and using their insight, knowledge and skills to identify and drive the low cost or no cost opportunities that help optimise service and costs for the customer.

• A CSI register(s) and supporting process is implemented to ensure all CSI improvements are captured, mapped to the relevant IT services and customers groups with benefits quantified in business terms.

To summarise and provide some final food for thought….. there is no value in value of your customers don’t recognise it and therefore no matter how good you are, if your customers can’t see, feel, or sense it, then you’re not delivering value and you are now seen as a cost!This blog is a precis of a white paper “Recognising Customer Value” written by leading Sysop consultant Ian MacDonald and qualified as a finalist in the 2017 itSMF awards. To see the full paper, follow this link: http://www.sysop.co.uk/your-account/downloads?c=1

I enjoy the conversations I have with students attending our ITIL® courses. They normally revolve around the maturity of their organisation compared to documented best practice. This has led Sysop to put a survey in the field to see if we could establish the overall take-up and maturity of IT service management. The results are somewhat alarming:

OVER 50% OF COMPANIES ARE NOT READY FOR MAJOR INCIDENTS! • Over a third have an IT-business alignment problem • 37% point to low or no IT professional development • 13% have no Change Manager

33% of respondents say they ‘need to do more to align their IT with the business’, with 4% admitting that their IT-business alignment is ‘poor’. Almost two in ten also say that management has ‘no understanding’ (5%) or a ‘poor understanding’ (14%) of the importance of IT to the business.

Remember that IT Service Management is, for the most part, a cultural change. To bring about this level of change requires patience and tenacity. I would endorse the methodology suggested by Dr. John Kotter – it has just eight steps.

Step 1: Establish a Sense of Urgency
Help others see the need for change and they will be convinced of the importance of acting immediately.

Step 2: Create the Guiding Coalition
Assemble a group with enough power to lead the change effort, and encourage the group to work as a team. Make sure this group includes a senior management sponsor, management buy-in is key.

Step 3: Develop a Change Vision
Create a vision to help direct the change effort, and develop strategies for achieving that vision.

Step 4: Communicate the Vision for Buy-in
Make sure as many as possible understand and accept the vision and the strategy.

Step 6: Generate Short-term Wins
Plan for achievements that can easily be made visible, follow-through with those achievements and recognise and reward employees who were involved. If you are a million miles from having a Configuration Management System, despite the fact that it would be wonderful, to have one in place don’t even try to start with this! Look at the areas that you already do pretty well but could do better, this will give you a good starting point.
Approach the task by trying to see which gaps in your processes you could bridge with least effort.

Step 7: Never Let Up
Use increased credibility to change systems, structures, and policies that don’t fit the vision, also hire, promote, and develop employees who can implement the vision, and finally reinvigorate the process with new projects, themes, and change agents.

Step 8: Incorporate Changes into the Culture
Articulate the connections between the new behaviours and organizational success, and develop the means to ensure leadership development and succession. Remember the advice of W. Edwards Deming: gradual, incremental changes are most easily assimilated.

I don’t normally like admitting to my age – but this week I am celebrating a pretty major milestone – 50 years in IT. I’ve always considered myself particularly lucky to have begun an IT career when the industry was in its infancy, when we were fresh-faced, young and pioneering.

I left grammar school at 16 with a handful of ‘O’ levels and had been intrigued by computers for some little while. Luckily, for me, a neighbour friend was an IT Operations Shift Leader at Dunlop and suggested that I apply as a trainee operator. I took to it like a duck to water. Operating large mainframes which were tape-based was demanding work physically. The tapes were 3.600 ft zinc spools and some 100 tapes per shift needed to be mounted / demounted on the eight tape decks on each of the huge LEO III mainframes. Understanding what was going on came much more easily. I had a natural aptitude for IT and in that respect it has never been hard work.

I was just 19, when my boss asked me to set-up and run an offline job-assembly function. The goal (successfully achieved) was to improve consistency and reduce job-assembly errors. This work caught the attention of a senior colleague who head-hunted me to join him as Chief Operator at Halfords in the centre of Birmingham. The small ICT 1901 mainframe here was a step down from the sophistication of the LEO and, at the tender age of twenty, I had the challenge of supervising the operation of three shifts, job and data control.

I began to take an interest in the George II operating system and pioneered its implementation to streamline operations and reduce mis-operation. This led to a change of career as I learnt how to program in PLAN – an assembler language proprietary to ICT 1900 mainframes. I loved it and determined a short while later that I could earn much more money as a freelance programmer.

Very soon I was assigned to a major development project for Woolworth – all in COBOL. I hadn’t written a COBOL program in my life but I had, at least, covered the basics in a college course. My PLAN and GEORGE II experience stood me in very good stead and I quickly earned a reputation as the technical guru. I could understand diagnostic dumps when many of my colleagues found them perplexing.

I was a freelance programmer at Woolworth for nearly three years when the new Data Centre Manager asked me to join the management team and establish a competent technical and operations support department – again with the principal objective of improving consistency of service and reducing error.

Now I was really in my stride. I had some very competent technical guys but the challenge was to develop the operations support group, exploit the operating system and bring real business benefit to the organisation. This opportunity was enhanced when I led the project to migrate the George II workload to the newly launched ICL 2900 range under VME.

This was exciting pioneering written large! Woolworth IT developed a reputation for leading-edge technology and practices and I was often invited to speak at User Group conferences and joined working parties to help steer ICL development plans – most of them focusing on reliability, consistency of service and error reduction – a bit of a recurring theme here.

My responsibilities at Woolworth increased and I was given responsibility for not only the Rochdale data centre but also the data centres in Swindon and London. Life was certainly getting exciting!

In 1985 everything changed. A new IT Director changed the technical direction from ICL to IBM. Senior IT professionals with extensive experience of IBM operations were parachuted in and I was offered a very attractive package to go do something else – and that something else was Sysop.

The early days of Sysop saw an increasing fruitful partnership with ICL. We pioneered the development of storage management systems to exploit the capabilities of automated tape libraries – always looking at ways to help clients reduce cost, improve reliability, and improve storage management.

Then along came ITIL®.

In 1990 Sysop was one of only three companies who offered training in IT Service Management. The other two no longer exist – which makes Sysop the world’s longest exponent of ITIL. Sysop consultants have travelled the world, working with clients in across Europe, Australia, South America, USA, the Middle East and South Africa.

We continue to innovate and see ourselves as a new breed of IT educator. My team champions the alignment of IT with business, promotes the pivotal role of the IT professional and believes that the primary purpose of training and education is to change behaviour in the workplace.

Our mission is to provide a more creative and stimulating, world class educational environment that addresses vital areas of IT service management. Our training and education is designed to make ITIL more accessible, digestible and relevant for its clients, while its practical workshops can be tailored to the specific needs of the client organisation.

Our goal is still to help our clients improve their IT services focusing on reliability, consistency of service and error reduction – Now that does sound familiar?

I’ve been busy of late preparing our recently announced Business Relationship Management Workshop. The workshop programme has set me thinking about many of the practical areas of IT service management and how organisations can make sense of the documented best-practice and successfully adapt it to the benefit of their the employer organisation.

I have absolutely no doubts about the importance of the Business Relationship Management (BRM) role to the successful provision of IT services but I do wonder if the artificial segregation of the business and IT into customer and service provider is the most effective way of handling this critical relationship.

There are numerous other examples of specialist service departments within business organisations: HR, Finance, PR, Estates, and CSR. The heads of these departments would be horrified if they were not considered to be part of “the business”. So why does IT continually place itself at arms-length?

I am reminded of the story of the US politician who visited NASA. A keen gardener himself he was interested in the activity of the man working in the neatly-tended flower beds. Approaching this man, the politician enquired as to what he was doing. “Sir”, came the reply “, I’m helping to put a man on the moon!”

Part of the answer is our attempt to design one model that covers outsourced as well as insourced IT. Part of it could be the sheer size and intensely specialist elements of IT. Part of it could be the attitude of the business itself – not understanding IT and therefore introducing intermediaries to translate business language into technical requirements and vice versa.

A key objective of the IT Service Management Training that we offer is to foster an increased awareness of business priorities within the internal IT service provider staff. Should we not, therefore, strive to achieve the ultimate goal of everyone taking ownership of the business, its mission and goals?

There lies the rub!

I suspect that even if we achieved this magnificent goal, the business would still want to deal with the ‘techies’ at arms-length. It is an imperfect world. This is why we need IT professionals who can bridge the divide. We need IT professionals to fill the role of Service Owners, Service Managers and Business Relationship Managers. These professionals essentially take on the responsibility for continually seeking opportunities to exploit Information Technology to further the aims and objectives of the business.

Until the day dawns when the technology is understood by everyone, when business objectives can be achieved without whole armies of technical staff, we will need these vital intermediaries.

The ITIL® core volume Service Operation is not particularly helpful with regard to Major Incidents. It basically says: “A separate procedure, with shorter timescales must be used for ‘major’ incidents. A definition of what constitutes a major incident must be agreed and ideally mapped onto the overall incident prioritization scheme – such that they will be dealt with through this separate procedure.”

In our recent “Managing Major Incidents” workshops we have had an opportunity to discuss the topic with a good cross-section of IT professionals; to present our thoughts and; perhaps more importantly, gain valuable feedback as to what represents best practice in the field. What follows is our distillation of that best practice and a corresponding process flow to help support it.

Key Recommendations

1. Be clear what your organisation means by “Major Incident”
2. Appoint one person (preferably the Service Delivery Manager) to determine the severity of the MI and to invoke the MI process if appropriate.
3. Gather together a “war cabinet” of key people to help ensure that adequate, appropriate resources are made available to speedily resolve the MI.
4. Make certain that any escalation to the business can happen speedily and effectively.
5. Place the Disaster Recovery team on stand-by.
6. Be prepared to de-escalate as a solution emerges.

More Information

More information, including a practical process flow and narrative that we believe represents industry best practice in this particular area, is available from the Sysop Resource Centre http://www.sysop.co.uk/your-account/downloads.

You will need to log-in, and possibly register, on the website to access the downloadable resources area. Once there, you will see the categories of downloadable resources, the first of which is “Articles”. Click VIEW RESOURCES and you will see that the first two articles are the Major Incident Process Flow and Managing Major Incidents narrative.

Once every quarter the ITIL® examination bodies release the statistics for examinations taken by geographic territory.

It’s good to see that the world-wide numbers of IT professionals taking service management exams is still increasing but I find it disturbing that so many do not extend their professional development beyond Foundation level. The total number of IT professional sitting the ITIL Foundation exam is ten times more that the total number of students taking Intermediate exams. This means that only about one in a hundred goes on to qualify as an ITIL expert.

I know, from contact with clients, that service management is far from a mature discipline. The operational processes (Incident, Problem etc.) are generally well established. But clients are still struggling to gain control over key processes like Change and Asset Management.

It’s very obvious from looking at the job titles of course attendees that the desire for ITIL competence is still very much skewed towards the operations support and technical areas. It is still pretty rare to see IT professionals who work in the design or transition lifecycle stages – let alone strategic management.

I am absolutely convinced of the value of sound service management processes. I know that client organisations can benefit enormously from the ITIL service management framework. We have to persuade designers and developers to take a greater interest in developing their service management skills?

When I’m talking to customers, I’m continually reminded that many (or should I say “most”) of them have no accurate records of what IT assets they have or where they are located. For the most part, of course, I’m referring here to physical items of hardware. The problem is worse, much worse, when one considers software assets – for here there is a question not just of good management control but a legal obligation to adhere to licence and intellectual property agreements.

One of the most productive ways of helping a customer to reduce their IT costs is to carry out a hardware and software audit. So often we find hardware maintenance contracts in place for hardware assets that were disposed of years ago and of course the same is true of software assets.

However there is a massive sting in the tail in the case of software assets – Licence types and rights to use.

Probably the most common gotcha is the over-deployment of a software item. How many active copies is your company licenced to deploy, how many are actually deployed and where are they?

Another of the more common “gotchas” with licensing, is that sometimes people have purchased upgrade licences, but not considered the whether the base licence is already in place to upgrade from. No base licence – no rights to upgrade!

Another one of the “gotchas” is accounting for deployments. E.g. thinking that Microsoft Server 2008 (Standard Edition) can be virtualised as many times as a company likes. (Technically, it can be – providing you are prepared to pay for it!) Unlimited virtualisation rights are the preserve of the Datacenter edition of the product!

Take the time to research Product Use Rights and licence metrics – not least in the development environment: does your licence permit the installation for the purposes of testing, demonstration and evaluation or are further licences required?

The standard ITIL programme of courses covers service asset & configuration management but goes nowhere near the specialist requirements of software asset management. Let’s hope that the new AXELOS arrangement gives due prominence to this very important IT discipline.